Lonestar Resources, Ltd. Presentation to Investors Jefferies Global Energy Conference

Transcription

1 Lonestar Resources, Ltd. Presentation to Investors 214 Jefferies Global Energy Conference

2 Disclaimer and Forward Looking Statements Disclaimer This document has been prepared by Lonestar Resources Limited ( Lonestar or Company ) in connection with providing an overview to interested analysts / investors. The information in this presentation is of a general nature and does not purport to be complete. This announcement is not intended as and shall not constitute an offer, invitation, solicitation, or recommendation with respect to the purchase or sale of any securities in any jurisdiction and should not be relied upon as a representation of any matter that a potential investor should consider in evaluating Lonestar. Lonestar, nor any of its affiliates, subsidiaries, directors, agents, officers, advisers or employees, make any representation or warranty, express or implied, as to or endorsement of, the accuracy or completeness of any information, statements, representations or forecasts contained in this announcement, and they do not accept any liability or responsibility for any statement made in, or omitted from, this announcement. Lonestar accepts no obligation to correct or update anything in this announcement, except as required by law. No responsibility or liability is accepted and any and all responsibility and liability is expressly disclaimed by Lonestar and its respective affiliates, subsidiaries, directors, agents, officers, advisers and employees for any errors, misstatements, misrepresentations in or omissions from this announcement. Users of this information should make their own independent evaluation of an investment in or provision of debt facilities to Lonestar. Nothing in this announcement should be construed as financial product advice, whether personal or general, for the purposes of section 766B of the Corporations Act 21 (Cth). This announcement does not involve or imply a recommendation or a statement of opinion in respect of whether to buy, sell or hold a financial product. This announcement does not take into account the objectives, financial situation or needs of any person, and independent personal advice should be obtained. This announcement and its contents may not be reproduced or re distributed in any way without the express written permission of Lonestar. Lonestar has presented petroleum and natural gas production and reserve volumes in barrel of oil equivalent ( boe ) amounts. For purposes of computing such units, aconversion rate of 6, cubic feet of natural gas to one barrel of oil equivalent (6:1) is used. The conversion ratio of 6:1 is based on an energy equivalency conversion method which is primarily applicable at the burner tip and does not represent value equivalence at the wellhead. Readers are cautioned that boe figures may be misleading, particularly if used in isolation. Forward Looking Statements Statements in this announcement reflect management's expectations relating to, among other things, target dates, Lonestar s expected drilling program and the ability to fund development are forwardlooking statements, and can generally be identified by words such as "will", "expects", "intends", "believes", "estimates", "anticipates or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward looking statements. Statements relating to reserves are deemed to be forward looking statements as they involve the implied assessment, based on certain estimates and assumptions that some or all of the reserves described can be profitably produced in the future. These statements are not historical facts but instead represent management's expectations, estimates and projections regarding future events. Although management believes the expectations reflected in such forward looking statements are reasonable, forward looking statements are based on the opinions, assumptions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. These factors include risks related to: exploration, development and production; oil and gas prices, markets and marketing; acquisitions and dispositions; competition; additional funding requirements; reserve estimates being inherently uncertain; incorrect assessments of the value of acquisitions and exploration and development programs; environmental concerns; availability of, and access to, drilling equipment; reliance on key personnel; title to assets; expiration of licences and leases; credit risk; hedging activities; litigation; government policy and legislative changes; unforeseen expenses; negative operating cash flow; contractual risk; and management of growth. In addition, if any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward looking statements contained in this document. Such assumptions include, but are not limited to, general economic, market and business conditions and corporate strategy. Accordingly, investors are cautioned not to place undue relianceonsuchstatements. All of the forward looking information in this announcement is expressly qualified by these cautionary statements. Forward looking information contained herein is made as of the date of this document and Lonestar disclaims any obligation to update any forward looking information, whether as a result of new information, future events or results or otherwise, except as required by law. Currency All amounts in this presentation are US$ unless otherwise stated. Lonestar s presentation currency is $US. 2

3 Company Profile Lonestar is a rapidly growing E&P company focused on the Eagle Ford Shale Drilling and acquisition capital concentrated in the crude oil window of the Eagle Ford Shale Long term development plan is funded out of cash flow Combine management and technical expertise with balance sheet to opportunistically consolidate assets in the oil window Maximize value of Conventional and Bakken assets Share Price (US$) $.6 $.5 $.4 $.3 $.2 Crude Oil 78% $.1 Share Price History NGLs 9% Crude Oil 76% $. Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Volume Share Price NGLs 9% Volume (MM Shares) Financial Profile Asset Profile 3 Ticker: OTCQX:LNREF ASX: LNR Share Price 1 : $.25 Shares Out : MM Market Cap 1 : $188 MM Cash 2 : $14 MM Long Term Debt 2 : $237 MM Enterprise Value : $411 MM 214 EBITDAX Guidance: $92 97 MM 1P Reserves (YE 13): 25.8 MMBoe Liquids (%): 87% Proved Developed (YE 13): 9.4 MMBoe 1P PV 1 (YE 13): $564 MM 2P PV 1 (YE 13): $679 MM 3P PV 1 (YE 13): $778 MM R/P Ratio: 15.7x 1 In U.S. dollars, as of November 6th, In U.S. dollars, as of September 3 th, Please see the reserves disclosures at the end of this presentation 3

4 Lonestar s Footprint 1 BAKKEN THREE FORKS 35, net acres Resource Assessment 3 D Seismic Complete 41 Conventional Prospects identified Intense Fracturing in Unconventional Targets CONVENTIONAL OIL & GAS Mature Producing Assets 3.8 MMBOE of Engineered Reserves $14 MM of EBITDAX, $2 MM of Capital Spending EAGLE FORD SHALE 3,36 net acres Active Acquisition & Development 4. MMBOE of Engineered Reserves 95% of Lonestar s 214 Capital Budget 1. Please see the reserves and EBITDAX disclosures at the end of this presentation 4

5 Management Team Background and Track Record

6 High Caliber Management Team Executive Previous Experience Biography Frank D. Bracken, III Chief Executive Officer GOG Gerrity Oil & Gas Over 28 years experience in oil and gas finance Previously Managing Director at Jefferies LLC, where he led >$5 billion in oil and gas transactions Former CFO / Board Member of Gerrity Oil & Gas Corp, a NYSE listed E&P Company Barry D. Schneider Chief Operating Officer Over 28 years oil and gas industry experience Senior level expertise in management of regional business units at large independent oil & gas companies Previously with US public companies Denbury Resources and Conoco Phillips Tom H. Olle Senior Vice President Operations Over 36 years oil and gas industry experience Senior level expertise in reservoir management / project development across a broad array of reservoir types Previous senior roles at US public companies Encore Acquisition Corp and Burlington Resources Douglas W. Banister Chief Financial Officer CPA with 28 years experience in finance, planning and business development Prior experience with international companies such as Uniden, LSG Sky Chefs, and Ernst & Young Most recently, VP / Controller at ontargetjobs.com High Caliber Executive Team with Deep Industry Expertise and 3 Years of Average Experience 6

7 High Caliber Management Team (Cont d) Executive Previous Experience Biography Scott E. Sabatka Vice President Geosciences Over 34 years US / international exploration and development experience, including in the Texas Gulf Coast, Permian, Williston, Powder and Malay Basins Previously Director of Geosciences at Approach Resources, Northern Region Geoscience Manager at Encore Acquisition Corp, and a Sr. Staff Geologist for Exxon Joe Young Manager Drilling & Completions Engineer with 13 years of experience in drilling and completions Positions of increasing responsibility at Schlumberger Drilling and completions engineer at Pioneer Natural Resources in Eagle Ford Shale and Wolfcamp Shale plays Tracy Hindman Manager Field Logistics Service Drilling Over 31 years of oil and gas service experience 16 years of turnkey drilling experience at Service Drilling, Southeast, LLC Most recently General Manager Gulf Coast Division of Unit Drilling Texas Rod Hicks Manager Field Operations Over 33 years of oil and gas drilling, completion and operations experience Held positions of increasing responsibility at Kerr McGee, Encore Acquisition Corp, and Quantum Resources High Caliber Executive Team with Deep Industry Expertise and 3 Years of Average Experience 7

8 Eagle Ford Shale Growth and Development Plan

9 1 ($mm) $4 $35 $3 $25 $2 $15 $1 $5 $ Ba rnet EFSA MU Lonestar s Track Record of Rapid Growth Net Acreage Eagle Ford Shale Trend Reserves (MMBOE) 1 35, 3, , 2, 15, 1, 5, Engineered Dec 11 Dec 12 Dec 13 Proforma LNR CWEI Recently Acquired Dec 11 Dec 12 Dec 13 Proforma Proved Probable Possible PV 1 1 EBITDAX 2 $9 $1 $8 $7 $6 $5 $4 $3 $2 $1 $ Dec 1 Dec 1 1 Dec 12 Today1P PV Dec 11 Dec 12 Dec 13 Today Proved Probable Possible $9 $8 $7 $6 $5 $4 $3 $2 $1 $ Guidance Dec 11 Dec 12 Dec 13 Guidance 1 Please see the reserves disclosures at the end of this presentation 2 Please see the EBITDAX assumptions at the end of this presentation 9

10 Intermediate Term Objectives Position Us Well Build A Lease Position That Yields Highly Economic Wells (Even in a $7 Oil Price Environment) 3, Net Acres in the Crude Oil Window That Allow For Sustained Drilling Activity First Material Lease Expirations Occur in 216, Easily Addressed with 215 Drilling Program Average IRR s at $7 Oil to $8 WTI Western Region 32 to 46% IRR Central Region 21 to 31% IRR Eastern Region 35 to 51% IRR Construct A Capital Structure That Transcends Industry Volatility Senior Unsecured Debt $22 MM 4 ½ Years Remaining Term Only Event of Default Non Payment of Interest ($19.3 MM = 7 weeks of Annualized Oct. 14 EBITDAX) Senior Secured Credit Facility $15 MM, with $22 MM Drawn at Sept. 3 th Increased in November from $18.8 MM $128 MM of Liquidity = 65% of Current Equity Market Capitalization Establish A Durable Cash Expense Structure Develop a High Margin Cost Structure Eagle Ford Operating Expenses (LOE and Taxes) $11.34 per BOE Eagle Ford Total Cash Costs (LOE, Taxes, G&A and Interest Expense) $25. per BOE Protect Our Oil Revenues Via Hedging 2,5 bopd swapped at $88. per bbl of Analysts projected 215 crude oil production Adds >$5. per barrel to 215 crude oil realization Current Mark to Market Gain of $9.3 MM 1

11 214 Eagle Ford Shale Margin Analysis Field Operating Expense Per BOE Total Cash Costs Per BOE $18 $16 $14 $12 $1 $8 $6 $4 $2 Production 6, 5, 4, 3, 2, 1, $4 $35 $3 $25 $2 $15 $1 $5 Production 6, 5, 4, 3, 2, 1, $ 1Q14 2Q14 3Q14 Oct 14 $ 1Q14 2Q14 3Q14 Oct 14 LOE Prod. Taxes LOE Prod. Taxes Interest Expense G & A Field Margin Per BOE Cash Margin Per BOE $11 $1 $9 WTI $11 $1 $9 $11 $1 $9 WTI $11 $1 $9 $8 $8 $8 $8 $7 $7 $7 $7 $6 $6 $6 $6 $5 $5 $5 $5 $4 $4 $4 $4 $3 $3 $3 $3 $2 $2 $2 $2 $1 $1 $1 $1 $ 1Q14 2Q14 3Q14 Oct 14 $ $ 1Q14 2Q14 3Q14 Oct 14 $ Field Margin LOE Prod. Taxes Hedging Gain/Loss *Interest Expense for 1Q14 is proforma Lonestar s note offering LOE Prod. Taxes Interest Expense G & A Cash Margin Hedging Gain/Loss 11

12 Quarterly Financial Summary Quarterly Production Total Company Quarterly Production Total Company Production (BOEPD) 6, 5,5 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Crude Oil Natural Gas Liquids Natural Gas October 14 Production (BOEPD) 6, 5,5 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 October 14 Western EFS Central EFS Eastern EFS Conventional Barnett Shale EBITDAX Discretionary Cash Flow $35. $14. $3. $12. Quarterly EBITDAX($MM) $3. $25. $2. $15. $1. $5. $12. Annualized EBITDAX ($MM) Quarterly DCF ($MM) $25. October 14 $1. Run Rate $2. October 14 $8. Run Rate $15. $6. $1. $4. $2. $5. $1. $8. $6. $4. $2. Annualized DCF ($MM) $. 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 $. $. 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 $. 12

13 Eagle Ford Shale Asset Overview

14 Portfolio Focused on the Eagle Ford Total Eagle Ford Net Acres 3,36 Gross Engineered Locations 136 Additional Locations 86 Engineered Acreage Non Engineered Acreage Non Recently Acquired Acreage Avg. W.I. 89% Eastern Net Acres 1,877 Gross Engineered Locations 25 Additional Locations 61 Avg. W.I. 88% Central Net Acres 11,32 Gross Engineered Locations 63 Additional Locations 9 Avg. W.I. 98% Western Net Acres 8,18 Gross Engineered Locations 48 Additional Locations 16 Avg. W.I. 79% 14

15 Western Region Summary Overview LEASE & DRILLING SUMMARY Gross Leasehold 1,32 Net Leasehold 8,18 % HBP 87.2% Top EPS 6,5' to 7,9' Lateral Lengths 4,' to 8,' Assumed Spacing 5' Burns Ranch Engineered Acreage Upside Acreage Recent Acquisition Asherton RESERVES SUMMARY # Oil NGL's Gas Equiv. PV 1 Category Wells (MMBbls) (MMBbls) (Bcf) (MMBOE) ($MM) PDP $175.4 PUD $18.2 Proved $355.6 Probable $19.3 Possible $1.9 Total Reserves $376.7 Beall Ranch Producing Eagle Ford Well Permitted Eagle Ford Well Please see the Reserves disclosures at the end of this presentation Single Well IRR Sensitivities (1,2) Western Region Composite Type Curve Lateral Length (Ft.) 4, 5, 6, 8, Capex ($MM) $5. $5.9 $6.4 $7.5 Oil Price ($ / Bbl) $7. 21% 27% 22% 32% $8. 32% 39% 32% 46% Type Curve Assumptions Lateral Length (Ft.) 5, D&C Costs ($MM): $5.9 Gross EUR (MBoe): 373 % Oil: 79% % Gas: 21% 3 Day Sales IP (Boe/d): 534 LOE ($/Boe): $11.44 Production (Boepd) Oil NGLs Dry Gas $9. 45% 54% 44% 61% Sev. Tax Oil (%): 4.6% Sev. Tax Gas (%): 7.1% Note: Type curves engineered by W. D. Von Gonten & Co. (1) Assumes flat natural gas price of $4. / Mcf. (2) Assumes flat LLS differential of $3. / bbl. Ad Valorem Tax (%): 1.7% Months on Production 15

16 Central Region Summary Overview LEASE & DRILLING SUMMARY Gross Leasehold 11,587 Net Leasehold 11,32 % HBP 48.% Top EPS 6,7' to 7,9' Lateral Lengths 5,' to 7,5' Assumed Spacing 75' Pirate Gonzo So. Gonzales Engineered Acreage Upside Acreage Recently Acq d RESERVES SUMMARY # Oil NGL's Gas Equiv. PV 1 Category Wells (MMBbls) (MMBbls) (Bcf) (MMBOE) ($MM) PDP $22.4 PUD $61.4 Proved $83.8 Probable $77.7 Possible.... $. Total Reserves $161.5 Producing Eagle Ford Well Permitted Eagle Ford Well Please see the Reserves disclosures at the end of this presentation Single Well IRR Sensitivities (1,2) Central Region Composite Type Curve Lateral Length (Ft.) 6, 7, 8, Oil Price ($ / Bbl) Capex ($MM) $6.2 $6.9 $7.4 Note: $7. 18% 21% 25% $8. 27% 31% 37% $9. 38% 43% 51% Type curves engineered by W. D. Von Gonten & Co. Type Curve Assumptions Lateral Length (Ft.) 6, D&C Costs ($MM): $6.2 Gross EUR (MBoe): 31 % Oil: 94% % Gas: 6% 3 Day Sales IP (Boe/d): 385 LOE ($/Boe): $15.58 Sev. Tax Oil(%): 4.6% Sev. Tax Gas(%): 7.1% Production (Boepd) Oil NGLs Dry Gas (1) Assumes flat natural gas price of $4. / Mcf. (2) Assumes flat LLS differential of $3. / bbl. Ad Valorem Tax (%): 1.7% Months on Production 16

17 Eastern Region Summary Overview LEASE & DRILLING SUMMARY Gross Leasehold 12,37 Net Leasehold 1,877 % HBP 34.% Top EPS 7,8' to 8,5' Lateral Lengths 5,' to 6,4' Assumed Spacing 8' Aguila Vado Engineered Acreage Upside Acreage Recent Acquisitions RESERVES SUMMARY # Oil NGL's Gas Equiv. PV 1 Category Wells (MMBbls) (MMBbls) (Bcf) (MMBOE) ($MM) PDP $17.7 PUD $33.6 Proved $51.3 Probable $17.7 Possible $96.8 Total Reserves $165.8 Please see the Reserves disclosures at the end of this presentation Producing Eagle Ford Well Permitted Eagle Ford Well Single Well IRR Sensitivities (1,2) Eastern Region Composite Type Curve Lateral Length (Ft.) 6, 7, 8, Oil Price ($ / Bbl) Capex ($MM) $6.9 $7.4 $8. $7. 23% 29% 35% $8. 34% 44% 51% Type Curve Assumptions Lateral Length (Ft.) 6, D&C Costs ($MM): $6.9 Gross EUR (MBoe): 36 % Oil: 95% % Gas: 5% 3 Day Sales IP (Boe/d): 583 LOE ($/Boe): $11.66 Production (Boepd) Oil NGLs Dry Gas $9. 48% 61% 71% Sev. Tax Oil (%): 4.6% Note: Type curves engineered by W. D. Von Gonten & Co. Sev. Tax Gas (%): 7.1% (1) Assumes flat natural gas price of $4. / Mcf. (2) Assumes flat LLS differential of $3. / bbl. Ad Valorem Tax (%): 1.7% Months on Production 17

18 Eastern Eagle Ford At Time of Lonestar s Entry Dunn A1H 745 BOEPD 16/64 choke Engineered Acreage Dunn A2H 641 BOEPD 16/64 choke Non Engineered Acreage Recently Acquired Producing EFS Well pre 1/14 Producing EFS Well since 1/14 Permitted EFS Well Active EFS Rig Ranger A4H 786 BOEPD 18/64 choke Ranger B1H 71 BOEPD 18/64 choke 1 Active EFS Rigs 78 EFS Producers 55 EFS Permits Brazos County 18

19 Eastern Eagle Ford Today Engineered Acreage Non Engineered Acreage Recently Acquired Producing EFS Well pre 1/14 Producing EFS Well since 1/14 Permitted EFS Well Active EFS Rig 21 Active EFS Rigs 184 EFS Producers 14 EFS Permits Carter Lake Brazos County 19

20 Conventional Assets Stability & Free Cash Flow

21 Conventional Assets 3.8 MMBOE Proved Reserves 1 79% Crude Oil 15% of Lonestar s Total Proved Reserves 74 BOEPD 3Q14Production 75% Crude Oil & NGL s 15% of Lonestar s Total Production Long Lived Reserves with Low Capital Requirements Reserves/Production ratio of 15 years Current Capital Plans <$2 MM annually Continue to Trim Around the Edges Sold Non Operated Raccoon Bend assets for $3.2 MM Sold for PV 11, Lowest Margin Asset in Conventional Portfolio West Texas North Texas East Texas South Texas Daily Production 1, 9 Net Production (BOEPD) North Texas West Texas East Texas South Texas Other 1. Please see Reserves disclosures at the end of this presentation 21

22 Bakken Three Forks Resource Assessment Moving Forward

23 West Poplar Project West Poplar Resource Assessment Greater Williston Basin Lonestar (65% WI) assembled 57,5+ gross acres in a contrarian move, across the Brockton Froid fault Horizontal Objectives Bakken, Three Forks, Lwr. Lodgepole Vertical Objectives Charles, Nisku, Greenhorn, Amsden, Mission Canyon, Tyler/Heath In July, 212 Lonestar and its partners drilled the Clark Farms #29 1 as a vertical completion Confirmed area is sufficiently mature, but not over cooked by Poplar Intrusion, as popularly believed Tested 4 o + API gravity crude from: Lower Lodgepole Bakken Three Forks Combined interval 15 thick one horizontal, one series of staged fracture stimulations to drain upwardly bounded by tighter Middle Lodgepole limestone downwardly bounded by anhydrite layer capping Nisku thinning of interval from Basin center has led to more brittle rock with macro and micro fractures as evident by cores Lonestar and its partners shot a 15 mi 2 3 D Survey, which has been processed and Interpreted 39 Charles targets $1.6 MM well costs, 154, BOE EUR 41 Nisku targets $2. MM well costs, 559, BO EUR 34 BPS locations $5.8 MM well costs, 5, BOE EUR 23

24 Appendix

25 Western Region Leasehold Detail Beall Ranch Asherton Burns Ranch Area Beall Ranch Gross Net 3Q14 Production (BOEPD) 3,212 2,354 Producing Eagle Ford Wells Engineered Acreage 2,373 2,318 Drilling Locations Proved 2 2 Probable Possible Engineered Locations Additional Acreage Drilling Locations Upside Acreage Recently Acquired Additional Locations 1 Asherton Gross Net 3Q14 Production (BOEPD) Producing Eagle Ford Wells Engineered Acreage Drilling Locations Proved 6 6 Probable 2 2 Possible Engineered Locations Additional Acreage Drilling Locations Upside Locations Recently Acquired Additional Locations 1 Burns Ranch Area Gross Net 3Q14 Production (BOEPD) Producing Eagle Ford Wells Engineered Acreage 1, Drilling Locations Proved 7 6 Probable 4 2 Possible 1 1 Engineered Locations Additional Acreage 3,516 3,182 Drilling Locations Upside Locations Recently Acquired 16 1 Additional Locations Engineered Acreage Upside Acreage Recently Acq d PUD Probable Possible Producing EFS Well 1 Gross and Net locations may not always correspond due to rounding Permitted EFS Well 25

26 Central Region Leasehold Detail Pirate South Gonzales Gonzo Pirate South Gonzales Gonzo Gross Net 3Q14 Production (BOEPD) Producing Eagle Ford Wells 8 8 Engineered Acreage 6,95 6,848 Drilling Locations Proved Probable Possible Engineered Locations Additional Acreage Drilling Locations Upside Acreage Recently Acquired Additional Locations 1 Gross Net 2Q14 Production (BOEPD) Producing Eagle Ford Wells Engineered Acreage Drilling Locations Proved Probable Possible Engineered Locations 1 Additional Acreage Drilling Locations Upside Acreage Recently Acquired 9 5 Additional Locations Gross Net 2Q14 Production (BOEPD) Producing Eagle Ford Wells 3 3 Engineered Acreage 3,383 3,383 Drilling Locations Proved 2 2 Probable 2 2 Possible Engineered Locations Additional Acreage Drilling Locations Upside Acreage Recently Acquired Additional Locations 1 Engineered Acreage Upside Acreage Recently Acq d PUD Probable Possible Producing Eagle Ford Well 1 Gross and Net locations may not always correspond due to rounding Permitted Eagle Ford Well 26

27 Lease Operating Expenses Total Eagle Ford LOE $14. $1.2 $12. $1. Per BOE $1. $8. $.8 $.6 LOE ($MM) $6. $4. $.4 $2. $.2 $. Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 $. 27

28 Quarterly Production Summary Quarterly Production Total Eagle Ford Quarterly Production Western Eagle Ford Production (BOEPD) 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 October 14 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Production (BOEPD) 4, 3,5 3, 2,5 2, 1,5 1, 5 October 14 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Crude Oil Natural Gas Liquids Natural Gas Crude Oil Natural Gas Liquids Natural Gas Quarterly Production Central Eagle Ford Quarterly Production Eastern Eagle Ford Production (BOEPD) 1, October 14 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Production (BOEPD) 2, 1,8 1,6 1,4 1,2 1, October 14 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Crude Oil Natural Gas Liquids Natural Gas Crude Oil Natural Gas Liquids Natural Gas 28

29 Glossary 1P reserves means proved reserves. 2P reserves means proved plus probable reserves. bbl means barrel. boe means barrels of oil equivalent, determined using a ratio of 6 Mcf of natural gas to 1 bbl of condensate or crude oil scf means standard cubic feet. btu means British thermal units. m prefix means thousand. mm prefix means million. b prefix means billion. pd suffix means per day. NGL means Natural Gas Liquids, including condensate these products are stripped from the gas stream at 3rd party facilities remote to the field. TEV means total enterprise value LTM means last twelve months NTM means next twelve months HBP means held by production EPS means earnings per share Note: BOE may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf : 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf : 1 bbl, utilising a conversion ration of 6 Mcf : 1 bbl may be misleading if used in isolation. 29

30 Reserves Information Reserves Reporting: Pursuant to ASX Listing Rules ( LR ) the reserves information in this document: (i) is effective as at 1 January, 214 (LR ) (ii) has been estimated and is classified in accordance with SPE PRMS (Society of Petroleum Engineers Petroleum Resources Management System) (LR ) (iii) is reported according to the Company s economic interest in each of the reserves and net of royalties (LR ) (iv) has been estimated and prepared using the deterministic method (LR ) (v) has been estimated using a 6:1 BOE conversion ratio for gas to oil, pursuant to the information in the disclaimer section of this document (LR ) Other Reserves Information: Lonestar operates most of its properties which are generally held by standard oil and gas lease arrangements. Detailed information on the operator and lease arrangements is generally disclosed in the Company announcement related to the initial acquisition of the properties. The Company s working interest ownership (WI%) and net revenue interest ownership (NRI%) in relation to each of its properties are generally included in the Company s presentations which are available on the ASX or the Company s websites. Well spacing assumptions and lateral length assumptions are generally included in the Company s presentations as is additional information on capital cost and taxation assumptions. Qualified Petroleum Reserves and Resources Evaluators: In accordance with ASX Listing Rules 5.41 and 5.42: The reserve reporting provided in this document in relation to the Company s Eagle Ford Shale properties is based on and fairly represents information and supporting documentation that has been prepared by Mr. William D. Von Gonten, Jr., P.E., and Mr. Taylor D. Matthes, P.E. who are employed by W. D. Von Gonten & Co Petroleum Engineering. Mr. Von Gonten holds a Bachelor of Science degree in Petroleum Engineering from Texas A&M University and Mr. Matthes holds a Bachelor of Science degree in Petroleum Engineering from Texas A&M University. Both of these persons are Registered Texas Professional Engineers. Mr. Von Gonten has 24 years of experience as a Petroleum Engineer and Mr. Matthes has more than 5 years of experience as a Petroleum Engineer. Both of these persons are members of the Society of Petroleum Engineers. Messrs. Von Gonten and Matthes have consented to the inclusion in this document of the information and context in which it appears. The reserve reporting provided in this document in relation to the Company s Conventional properties is based on and fairly represents information and supporting documentation that has been prepared by Mr. William M. Kazmann who is President and Senior Partner La Roche Petroleum Consultants, Ltd. Mr. Kazmann received his Bachelor of Science and Master of Science degrees in Petroleum Engineering from the University of Texas at Austin in 1973 and 1975 respectively. He has worked in the oil and gas industry since that time. Mr. Kazmann is a Licensed Professional Engineer in the State of Texas and is a member of the American Association of Petroleum Geologists, Society of Petroleum Engineers, Society of Independent Professional Earth Scientists (serving as National Director from 1993 to 1996 and National Treasurer in 1994 and 1995), Dallas Geological Society, and Dallas Petroleum Club (serving as Director from 24 through 26). Mr. Kazmann has consented to the inclusion in this document of the information and context in which it appears. Reserves Cautionary Statement: Hydrocarbon reserves and resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates that were valid when originally calculated may alter significantly when new information or techniques become available. Additionally, by their very nature, reserve and resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional drilling and analysis, the estimates are likely to change. The may result in alterations to development and production plans which may, in turn, adversely impact the Company s operations. Reserves estimates and estimates of future earnings are, by nature, forward looking statements and subject to the same risks as other forward looking statements. Commodity Pricing Used: Lonestar s reserves and PV 1 have bee estimated using index prices determined in accordance with US SEC pricing guidelines for oil and natural gas, without giving effect to derivative transactions, and were held constant throughout the lift of the properties. The unweighted arithmetic averages of the first day of the month prices for the year ended December 31, 213 were $96.94 per bbl for oil and $3.66 per mmbtu for natural gas and for the year ended December 31, 212 were $95.5 bbl for oil and $2.78 per mmbtu for natural gas. These prices were adjusted by lease for quality, energy content, regional price differentials, transportation fees, marketing deductions and other factors affecting the price received at the wellhead." 3

31 EBITDA Assumptions EBITDA estimates are based on the following assumptions: Production estimates as set out in this presentation. The total number of planned wells at each asset is consistent with assumptions contained in the respective reserve assessments. The estimated well drilling and completion capital expenditure is based on the most recent Authorisations for Expenditures at each asset (as of 31 December 213). Operating expenditure for each asset is based on the most recent Lease Operating Statements for each asset (as of 31 December 213). Oil prices and gas prices are based on a NYMEX futures pricing scenario as set out in the table below. Pricing adjustments are made to these prices for individual assets to account for quality, transportation fees, marketing bonuses and regional price differentials. Year Oil (US$/bbl) Gas (US$/MMBtu) 214 $92.55 $ $86.55 $